Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline for the House the benefits of the measures the government and the Reserve Bank have introduced to strengthen the RBA’s independence and to better communicate the reasons for its decisions?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for her question, because it is a very important one. Today the Reserve Bank released minutes of its February meeting, and this was a first. I do not intend to give a running commentary on Reserve Bank board minutes and their publication, but I would certainly like to welcome their publication and the increased transparency in the conduct of monetary policy. These minutes will help working families better understand the reasons behind interest rate movements.

Within weeks of the election of the Rudd government, the governor and I issued a joint statement on the conduct of monetary policy in which we committed to a number of governance reforms that enhance the independence and transparency of the Reserve Bank. The statement delivers on the Rudd government’s election commitment to strengthen the independence of the Reserve Bank and to enhance the transparency of its decisions. Firstly, and this is the very important one, we increased the statutory independence of the positions of the governor and the deputy governor so that termination would require parliamentary approval. Secondly, we agreed to make future Reserve Bank board appointments from a register of candidates of the highest integrity. This was to ensure we did not see a repeat of the Gerard affair.

Strengthening the independence of the RBA is a critical part of the government’s commitment to putting downward pressure on inflation and downward pressure on interest rates. The Rudd government has a five-point plan to fight inflation and will ensure the government is working with the Reserve Bank and not against it.